IRS Issues $5.6B in Faulty (Fraudulent?) Education Credits - Your Congress (and White House) At Work

The Internal Revenue Service potentially issued billions of dollars in faulty education tax credits in one year (2012) to taxpayers who did not qualify, according to a report from a government watchdog group.

http://www.usatoday.com/story/money/personalfinance/2015/05/05/irs-education-credits-report/26925645/

"The IRS still does not have effective processes to identify erroneous claims for education credits," said J. Russell George, Treasury Inspector General for Tax Administration.”

It’s no wonder, since in addition to the added burden of administering the collection of Affordable Care Act (Obamacare), the US Congress continues to reduce the IRS’s annual budget – budget cuts in each of the last five years.  Congress isn’t solely responsible.  The White House is also complicit – for almost every year since 2002, the budget proposed to Congress by the White House was always less, and sometimes much less, than the funds requested by the IRS.

http://fortune.com/2015/04/15/irs-budget-cuts/

Currently, the IRS has 10,000 fewer employees than it had Fiscal Year 2010.

The result: more errors, less scrutiny of tax returns, more dishonest taxpayers.

http://www.washingtonpost.com/opinions/irs-budget-cuts-will-compound-taxpayer-frustration/2015/01/19/d58ad862-9dcc-11e4-bcfb-059ec7a93ddc_story.html

IRS budget cuts will compound taxpayer frustration

By Editorial Board January 19

"THE INTERNAL Revenue Service may be the least-loved arm of the federal government. For tax-hating Republican lawmakers still angry over what they see as IRS malfeasance, the antipathy is especially strong. That explains why GOP lawmakers repeatedly have cut the agency’s budget over the past several years, including a 3 percent reduction this year . But no matter how therapeutic it may feel to hack away at the IRS, it is deeply irrational..."